Jim Farley, CEO of Ford Motor, praised the automaker’s strategy for electric vehicles on Friday, telling CNBC that the company plans to compete strongly in the growing market segment.
Farley’s comments on “Squawk on the Street” came a day after Ford reported better-than-expected results in the fourth quarter. As part of that announcement, Ford said it will increase its investment in electric vehicles to $ 22 billion through 2025, nearly double what it previously promised to spend.
Shares of Ford were up 2.7% during Friday’s session to around $ 11.70 each.
“We’re not going to hand over the future to anyone,” Farley told CNBC’s Phil LeBeau. “Our electric strategy is very specific. We are going to invest in segments where we are the dominant player and we have scale, such as the F-150, the Transit van and our Mustang.”
While Ford is investing new capital for years to come, Farley said the company’s transition to electric vehicles is now paying off, noting that the all-electric Mustang Mach-E crossover has hit showrooms. He said he sees the Mach-E as a “credible competitor” to Tesla’s compact SUV, known as Model Y.
Ford’s all-electric Transit van is expected to arrive by the end of this year, Farley noted, and the company is working on a Michigan plant to build the electric version of its best-selling F-150. “This is the year. We’re not talking about ambitions,” said Farley, who took over as CEO on Oct. 1.
The charging port for the Ford E-Transit van is located in the grille of the car.
Ford
Wall Street is increasingly focusing on electric vehicles. A number of players in the space, including battery manufacturers and charging station companies, have gone public in recent months. General Motors, Ford’s rival in crosstown, is also drawing attention from the streets for its aggressive investment in electric vehicles. GM said last week it plans to end production of all diesel and gasoline cars, trucks, and SUVs by 2035.
Even before that announcement, Morgan Stanley analyst Adam Jonas told CNBC that GM under CEO Mary Barra’s leadership may be “orchestrating one of the most profound strategic turnarounds, not just in the auto industry, but also in business.” GM shares are up more than 100% in the last six months, while Ford shares are up more than 65% along the same trajectory.
As the production and adoption of electric vehicles grows, some have raised concerns about a possible shortage of batteries. Farley acknowledged that if Ford ramps up electric car production, the company “must secure [battery] so that we don’t end up in a situation like we’re in chips. Ford had to temporarily reduce production of the F-150 in response to an ongoing shortage of semiconductors affecting the global auto industry.
“That boils down to the fact that every manufacturer makes the commitment,” said Farley. “We have to make our own decisions about vertical integration. Our $ 22 billion [EV investment] doesn’t even include that. You could expect more news from us about that vertical integration. “